"It is impossible for ideas to compete in the marketplace if no forum for
  their presentation is provided or available."           Thomas Mann, 1896

---

MANAGING RISK WITHOUT PRECEDENT:
Terror Attacks at Domestic Chemical Facilities

By Larry Kamer
Contributed by Kamer Consulting Group

Since September 11th 2001, industries and federal regulatory agencies have scrambled to address a risk that has no precedent in this country - the deliberate, criminal release of large quantities of chemicals from manufacturing facilities, with the intent to kill civilian targets or visit massive damage on the environment.

In 1997, the FBI derailed a KKK-inspired plot to blow up a hydrogen sulfide tank near Dallas; two years ago, the agency arrested two alleged militia members before they could ignite 24 million gallons of liquid propane at a facility near Sacramento. These incidents seemed at the time to be outliers on the spectrum of possible risk. Now, they seem squarely in the middle. 

One expert recently testified before a U.S. Senate committee that there are more than 800,000 facilities that manufacture, store, or handle large amounts of hazardous chemicals - not just massive facilities, but gas stations, rail cars, and community water treatment plants. The USEPA now estimates that more than 120 plants each have the capacity of endangering 1 million people if their chemical inventories were released into the environment.

By sheer numbers alone, lighting strikes cause more damage each year at industrial plants than terrorists or criminals ever have. The Insurance Information Institute estimates that five percent of all paid insurance claims are lightning related. Yet it’s a safe bet that there won’t soon be a national consensus building around the need to address lightning safety. 

That’s because September 11 may have thrown the "past is prologue" model of risk management out the window. Americans are reassessing what constitutes an acceptable risk - which has traditionally been a question of relatives, not absolutes, and the emerging scrutiny of America’s industrial plants suggests that zero risk may be the only acceptable answer to a nervous public. 

Although overshadowed by partisan debates on military tribunals and Bin Laden’s videos, the U.S. Senate now tackles this question of acceptable industrial risks as it takes up S. 1602, the Chemical Security Act of 2001, sponsored by Sen. Jon Corzine (D-NJ). 

The Corzine bill addresses the issue of criminal releases of hazardous materials, placing a significant responsibility on the operators of industrial plants to reduce their usage and storage of chemicals, to change their production, and to employ safer technologies.

Pressured by environmental interests and the "right-to-know" community, it is only a matter of time before the owners and operators of industrial facilities begin to defend themselves against criticism that they are managing ticking time bombs.

The public has become accustomed to plant operators disclosing the extent of chemical use, worst-case scenarios, and mitigation plans, thanks to the U.S. EPA’s Risk Management Program (RMP) of the late 1990s. But if the operators of industrial facilities want to avoid a repeat of some of the costly and mistake-prone exercises of the RMP program, there are several steps they would be wise to take now.

First, recognize the new realities of risk perception. Congress no longer needs the justification of a Bhopal for sweeping regulation of the chemical industry or an Exxon Valdez for hazardous materials transportation. The war on terrorism is built on the targeting of crossover risks. As Homeland Security Director Tom Ridge noted earlier this month: "Any time you make progress on one front, you have to be prepared for that enemy to use some of its resources and its assets elsewhere."

Second, communicate to stakeholders about safety, risks, and choices. Each of the above-mentioned mishaps triggered new rules and regulations that mandated operational as well as communication practices. This can be attributed to the perception that industry not only responded slowly to major crises, but failed to establish real dialogue with neighbors on the fence line, workers in the facilities, and local health officials. S. 1602 contains provisions mandating certain communications, as did legislation in the aftermath of Bhopal and Valdez. In responding to domestic terror risks, industry can develop meaningful communications programs now; or be forced to do so later. 

Third, remind policymakers that unfettered triumphs in the name of "right to know", such as the federal Risk Management Program, have come at a heavy cost. Right-to-know activists are already several laps ahead of industry in spinning the current debate. Industry is still getting its act together, despite the undeniable reality that the right-to-know community has published highly sensitive plant operational information on the Internet despite warnings of the FBI’ s domestic terror division and in light of the U.S. EPA’s decision to remove the same information from its site.

Fourth, use this opportunity to take a fresh look at best practices in the area of hazardous materials handling, process safety, emergency response planning, and crisis management. Industry must heed the findings of the Department of Health and Human Services’ Agency for Toxic Substances and Disease Registry that site security at thousands of industrial facilities in the U.S. is lacking. However flawed industry may find the ATSDR’s methodology, this report is already serving as powerful evidence that there is still much to be done in the realm of self-regulation.

Government agencies seem more than willing to step in where industry self-policing efforts are seen to fall short. Supervisors in Contra Costa County, California, where there have been more than 25 major industrial incidents since 1999, are already reviewing an ordinance that would force refineries in the area to install “inherently safer” technologies, a centerpiece of the Corzine bill.

ATSDR has published a 10-step procedure to analyze, mitigate, and prevent health hazards resulting from terrorism involving industrial chemicals. It includes traditional tenets of risk management, but wisely augments this planning to include steps necessary for dealing with public perceptions and concerns: a close look at health risk communication needs, the need to incorporate these into emergency response planning, and training exercises so that crisis response is second nature in the event of a terrorist-caused emergency.

Industries and their trade and professional associations would be wise to use this as a benchmark for public communications, and aggressively move into their communities to discuss progress and timetables for achieving these ten steps.

The stage is set for industry to distinguish itself in a world of changing perceptions and not cede the moral high ground to its traditional critics. The question remains: will the owners and managers of America’s industrial infrastructure acknowledge the new realities of risk and use it as a platform for leadership? Or will industry consign itself to a supporting and reactive role that will make the RMP program look like a warm-up act for what’s to come?

 Click Here for The Business Forum Library of White Papers  
 

Disclaimer

The Business Forum, its Officers, partners, and all other
parties with which it deals, or is associated with, accept
absolutely no responsibility whatsoever, nor any liability,
for what is published on this web site.    Please refer to: